Global consulting partnerships are not only reshaping public sector organisations along corporate lines and hollowing out government expertise in the process, but they have also been responsible for a significant decline in tertiary education quality and standards, including billions of dollars in wasteful expenditure on non-core business.

In the late 1980s and 1990s, Australia’s public universities were transformed into corporate enterprises informed by the principles of New Public Management (NPM). As the public sector version of neoliberalism, conservative and nominally progressive governments began adopting management structures, techniques, and processes from the private sector to deliver public services.

In applying NPM principles to tertiary education, governments assumed the success of the model relied on two fundamental changes: first, the introduction of market mechanisms of competition between universities, faculties and academics for students and funding, and second, the user-pays principles for all forms of tuition. A major consequence of incorporating NPM mechanisms and principles into university management and administration has been the adoption of commercial business models by vice-chancellors and university governing bodies. The result has been a radical shift from quality to quantity in higher education policies.

NPM proponents argue it has enabled mass tertiary education. However, most academics see the associated changes — even if they do not recognise them as outcomes of applying NPM — as having undermined academic values of collegiality and openness in the pursuit and reproduction of knowledge, skills, and expertise. A notable feature of university management and leadership run along NPM principles is the general lack of transparency and accountability in all decision-making. One recent example is the adoption by all of Australia's public universities of the IHRA working definition of antisemitism, which was neither debated nor approved by any university senate or governing body before its adoption.

Public debate about these issues has been extraordinarily deficient. While the negative consequences of the corporatisation of the country’s public universities are fairly widely recognised, what is less well known is that the corporatisation of universities has been enabled and assisted by networks of external consultants who act as gatekeepers for information regarding institutional operations and their relationships with those institutions.

Primarily informed by the Big Four accountancy partnerships (Deloitte, KPMG, PwC and EY) and the Big Four global consultancies (Boston Consulting, McKinsey & Company, Bain & Co and Accenture), public universities routinely draw on the expertise of international consulting firms while important details of their operations are withheld from public scrutiny.

The consulting partnerships have been particularly enthusiastic in their promotion of NPM principles, including the achievement of “efficiencies” through cost-cutting. More than 40,000 academics and professional staff have been sacked over the last several years at the same time as most universities have engaged in a variety of unlawful employment practices. This includes the systematic underpayment of tens of thousands of employees directly resulting from inappropriate, incorrect, and false categorisation of employees’ grades, positions, entitlements and pay scales to minimise compliance costs and/or university payroll obligations. In March this year, the National Tertiary Education Union noted that 154,872 university workers have had almost A$271 million stolen from them in wages over the last several years, with potentially more than $100 million of stolen wages yet to be exposed. The Big Four accountancy and audit firms have been responsible for overseeing internal and external audits for most, if not all, of these universities.

Although public universities are now major financial contributors to the consulting industry, there is no national consistency in the financial line items that must be disclosed by Australian public universities in their annual reports about expenditures on consultants. Investigative journalists from the _Sydney Morning Herald_ found that six public universities spent A$180 million on consultants in 2022 alone. If averaged across all 37 public universities, the total spending would have been over A$1 billion for that year. More recently, the Australian Financial Review reported the contempt with which vice-chancellors at ANU and UTS had treated staff’s, and even MPs’, requests for transparency about cost and content of work done by consultants.

Consultancies often play both sides of the street and are clearly and frequently involved in undeclared and undisclosed conflicts of interest. They have provided financial, legal, planning, and strategic advice to state and federal governments and public universities while simultaneously providing professional services to commercial entities that do business with them.

As successive Australian Governments have encouraged universities to become more “entrepreneurial”, they have changed their governing legislation to minimise the role of democratically elected staff and students on university governing bodies, while maximising the authority and decision-making power of university executives and senior management. Although these changes were ostensibly made to allow universities to become more financially independent and “business-like” in their operations, in actuality, the primary motivation has been to fill the funding gap left by shrinking government largesse. As a proportion of all expenditure, Commonwealth spending on tertiary education stood at 4.0% in 1988-89 and increased to 4.6% in 1991-92 when institutional amalgamation began under John Dawkins. In 2021-2, that proportion was at 2.4%, close to the all-time low of 2.2% under Brendan Nelson between 2004 and 2006.

All legislative amendments made to universities’ governing acts over the last 30 years have led to a predominance of business interests in university governing bodies and an erosion of the democratic representation of staff and students. Unlike publicly listed commercial corporations, however, the “shareholders” — that is, staff and students — have no decision-making rights, which means, in effect, that there are no independent means of holding the executive or the board to account. This includes the role and influence of global consultancy firms.

One way to establish more transparency and accountability from university executives and senior managers would be to apply 360-degree performance evaluation of them in the same way they evaluate academic and professional staff. If these rankings, metrics, quantitative targets and numerical data are such effective means of increasing performance and efficiency, surely it is equally reasonable for academic and professional staff to use them to evaluate management and the executive?

The idea that Australian public universities should be run independently of government by senior academics as self-governing institutions appears to our political leaders — and even some of our academic peers — as a quaint relic of a bygone era, even though many European universities follow far more democratic models of university governance. Public Universities Australia has developed a model act to reinvigorate Australia’s higher education system by ensuring sufficient representation of elected staff and students on governing bodies.

This would include the election of vice-chancellors, which, following the European model, would be drawn from within the university’s professorial ranks. It remains to be seen if either of the country’s major political parties have any appetite for genuine reform of Australia’s higher education system.